Tuesday, September 8, 2009

Prices gaped higher today then remained in a low to mid 1020s for the remainder of the day. Prices closed near the highs of the day, about a 10 point gain on the S&P 500.

The sideways action today looks like consolidation for another move higher. The higher the market goes, the less likely this has been an upward correction. Over 61.8% of the leg down since the 1039.47 peak has now been retraced. This is a hefty retracement, even for a second wave, especially if prices are poised to move higher again.

On an intermediate term basis, the path of least resistance is not clear given the wave structure. Bullish and bearish counts are shown, and there are arguments for both on a variety of scales. In any case, the market appears ready for another jump higher, then a pullback taking hours or days. Beyond that, time will tell.

Prices gaped higher today then remained in a low to mid 1020s for the remainder of the day. Prices closed near the highs of the day, about a 10 point gain on the S&P 500.

The sideways action today looks like consolidation for another move higher. The higher the market goes, the less likely this has been an upward correction. Over 61.8% of the leg down since the 1039.47 peak has now been retraced. This is a hefty retracement, even for a second wave, especially if prices are poised to move higher again.

On an intermediate term basis, the path of least resistance is not clear given the wave structure. Bullish and bearish counts are shown, and there are arguments for both on a variety of scales. In any case, the market appears ready for another jump higher, then a pullback taking hours or days. Beyond that, time will tell.

My trading philosophy is 95% based on my own Elliott Wave analysis of the S&P 500. I try to keep my analysis and trading as simple as possible and do not use trend lines, channels, or definite retracement, price, or time targets. To me, inspecting the proportionality and symmetry of a market's price structure is the key to mastering the principle; it is through this that low-risk, high-reward trading opportunities are found.

Because they are the only things I look at when trading, the quality of the charts I post on this blog are very important to me. I think you will find my work to be the best Elliott Wave analysis of the S&P 500 on the internet.